DMCI chief financial officer Herbert Consunji said the net loss was largely due to non-recurring items that consist of a P948-million write-off of non-operating assets and deferred charges of Semirara Mining Corp. (SMC) and a P552-million provision on the DMCI Group’s receivables from Atlantic, Gulf & Pacific Co. of Manila Inc. (AG&P).
Consunji said the P948-million write-off represented deferred charges and obsolete equipment pertaining to the Unong coal mine, which SMC ceased operating in January 2000 after the pit was found to be no longer economically viable.
He added a new mine, Panian – with an estimated recoverable coal reserves of 60 million metric tons (MT) – was developed shortly and made fully operational, making it necessary for the company to effect the said one-time write-offs.
Meanwhile, a provisioning was made on the DMCI Group’s receivables from AG&P in view of the latter’s financial difficulties. This was aggravated by the absence of new contracts for the company’s heavy steel fabrication business, which prompted management to scale down manpower, Consunji said.
He added the projected temporary lay-offs were disrupted by a strike, which led to a suspension of operations at the AG&P Batangas yard late last year. These provided compelling reasons for DMCI management to provide an allowance on receivables from AG&P.
"Over the near term, DMCI is expected to continue with efforts to divest from non-core assets in line with the thrust to strengthen its core competencies and sharpen its focus on underlying opportunities in construction and low- to middle-income housing development," Consunji said.